Wipro has reported better-than-predicted revenue for the second quarter of the fiscal year 2025 (Q2 FY25), driven by a resurgence in client spending within the US communications sector. Following the announcement, the Indian technology services and consulting company’s shares surged by up to 5.34%, reaching an intraday high of INR557.05 ($6.63) per share.
However, the company’s American Depositary Receipts (ADRs) closed 1.42% lower at $6.26.
For the quarter ended 30 September 2024, Wipro reported a growth of 21.3% year on year (YoY) in its net income at INR32.1bn ($382m). This also represents an increase of 6.8% quarter on quarter (QoQ).
The company’s earnings per share (EPS) for Q2 FY25 was at INR6.14 ($0.071), reflecting an increase of 6.8% QoQ and 21.3% YoY.
In the July-September quarter, Wipro’s consolidated revenue reached INR223.02bn ($2.65bn), marking a slight decline of 1% from the previous year but surpassing analysts’ estimates of INR222.58bn, according to LSEG data. The company’s revenue also showed modest growth, rising 1.5% QoQ.
Wipro’s IT services segment revenue reached $2.66bn reflecting a 1.3% QoQ increase but a 2% YoY decline. The non-GAAP constant currency IT services revenue showed a 0.6% QoQ rise and a 2.3% YoY fall.
On its earnings call, Wipro said it is committed to becoming an artificial intelligence (AI)-powered company and is making significant investments in generative AI (Gen AI).
The company categorises its AI initiatives into three key areas, namely AI-led projects in software development and product engineering, integrating AI into managed services to enhance operational efficiency and customer experience, and creating AI-powered solutions to transform processes with AI at the core.
Wipro sees substantial growth potential in AI and anticipates productivity benefits across these areas. The company is currently working on specific Gen AI projects aimed at improving clients’ back-office operations and processes.
Despite economic uncertainties, Wipro remains confident in the long-term strength of its business. It continues to focus on its five strategic priorities and is building a strong talent pool to capitalise on AI opportunities.
AI investment fuels prospects
The company has emphasised the importance of an AI-driven mindset among its workforce, with over 44,000 employees trained and certified in advanced AI, and many actively using AI developer tools in their work.
“Based on strong execution in Q2, we met our expectations for revenue growth, bookings, and margins. We continued to expand our top accounts, large deal bookings surpassed $1 Bn once again, and Capco maintained its momentum for another consecutive quarter, said Wipro’s CEO and managing director Srini Pallia.
He continued: “We grew in three out of four markets, as well as, in BFSI, Consumer and Technology and Communications sectors. We will continue to invest in our clients, our strategic priorities, and building a strong AI-powered Wipro.”
Wipro’s total bookings for Q2 FY25 amounted to $3.56bn, with large deal bookings reaching $1.5bn. This represents a substantial increase of 28.8% QoQ and 16.8% YoY in constant currency.
The company anticipates its Q3 FY25 revenue from the IT Services business segment to fall between $2.6bn and $2.66bn. This indicates a sequential guidance of a decline of up to 2% to no change in constant currency terms.
In Q1 FY25, Wipro reported a net income of INR30bn, an increase of 5.9% compared to INR28.7bn for the same quarter of the previous fiscal year.
Read more: Wipro’s Q1 FY25 net income increases by 6% to $360m
